You will need:
10.5" x 3.5" piece of fabric
12" x 2" piece of fabric (for strap)
2.5" x 3.5" heavy vinyl
Cut a 9" x 2.5" rectangle from your cereal box:
Fold in half along the line.
While it's still folded, trim off the corners of the open end (not the folded end).
It should look like this:
Spread some glue on the unprinted side- I used a glue stick:
Stick it to the wrong side of a 3.5" x 10.5" scrap of fabric, like this:
Trim the corners like this, leaving about 1/2" fabric all around. It doesn't need to be exact- just eyeball it.
Spread more glue on the printed side of the cereal box, and start folding in the raw edges of the fabric.
Keep folding & gluing down the fabric.
All the fabric should be glued down to the wrong side of the cereal box:
Now cut a 12" x 2" piece of fabric for the strap:
Iron with the wrong sides together, lengthwise:
Open up, and fold the raw edges to the middle line you just ironed. Both raw edges will meet in the middle on the folded line.
Here is one side being folded towards the middle crease- carefully iron again, without burning your fingers!
Take it to your sewing machine, and sew close to both side to enclose the raw edges.
Should now look like this:
Sew through all the layers, backtracking to secure the strap:
You will lay the 2.5" x 3.5" piece of vinyl on your luggage tag, and sew all the way around. The vinyl will create a pocket for your identification. They vinyl will not run smoothly along with your sewing machine foot, so I laid a piece of paper over the top to help with that. (If you have a Teflon foot, you may not need the paper).
Since the paper blocks your view of where you're sewing, I just creased along the edge of the luggage tag with my fingernail, so I could see the outline of the tag. Just sew about 1/8" away from the edges.
Here it is with the paper still on:
Now, just tear away the paper.
Here's the finished tag.